Web site scares auto dealerships

Feb. 11, 2012 at 5:03 PM
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SANTA MONICA, Calif., Feb. 11 (UPI) -- A haggle-free auto sales Web site has U.S. auto dealers concerned the public will become dangerously well-educated on car pricing, an industry expert said.

"Dealers are afraid if they give customers their best price, they will just take that price and go to another dealership and see if they can beat it," said Jeremy Anwyl, the vice chairman at Edmunds, an auto industry Web site.

The Web site that has provoked a negative reaction is TrueCar, which is aligned with 4,100 auto dealerships and presents car buyers the option of going online to find a guaranteed price from a local dealership, The New York Times reported Saturday.

TrueCar had the audacity, some would say, of revealing the dealers' true cost of a car.

Some dealership associations complained that this was going too far. The guaranteed prices eliminated the tradition of haggling for a price at the dealership. But the Web site was seen as potentially something that could drive down profit margins by provoking price wars.

"We have always said it is not a race to the bottom," said TrueCar Chief Executive Officer Scott Painter, referring to automobile prices.

"But there is no question that dealers' natural tendency to compete with one another has resulted in extremely low prices," he said.

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